⚠ Losses Take a Third of the InterestModerate threat

Citigroup (C) — threat to the moat

More than a third of Citi's card interest goes to cover charge-offs, and the reserve releases will not last.

1. ReportedIn the second quarter of 2026 U.S. Consumer Cards had net credit losses of $1,850 million against net interest income of $5,180 million, about 36%.
   Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - Wealth and U.S. Consumer Cards results and key metrics. — Q2 2026 · publ. 14 July 2026 · source ↗
2. Moat Explorer calcIn the second quarter of 2026 U.S. Consumer Cards had net credit losses of $1,850 million against net interest income of $5,180 million, about 36%.
   Moat Explorer calculation from Citigroup segment figures ($ millions unless stated; calendar years; segments as restated in the 8-K of 3 April 2026). Services: cross-border transaction value 416.4 / 279.5 - 1 = 49.0%, about half; U.S. dollar clearing 177.1 / 146.2 - 1 = 21.1%; fee revenue 6,385 / 4,967 - 1 = 28.5%, about 29%; net interest income 15,001 / 6,866 = 2.18 times, about 2.2; NII share 15,001 / 22,636 = 66.3%, about 66%; revenue 22,636 / 12,539 - 1 = 80.5%, about 81%; TTS 16,646 / 9,187 - 1 = 81.2%; Securities Services 5,990 / 3,352 - 1 = 78.7%, about 79%; Securities Services revenue over assets under custody 5,990 / 31,400,000 = 0.019%, about 1.9 hundredths of a percent; international share 15,729 / 22,636 = 69.5%, about 69%; share of Citi revenue 22,636 / 85,225 = 26.6%, about 27% (2025), 12,539 / 71,574 = 17.5%, about 18% (2021). Deposits: year-end 1,308,681 / 1,365,954 - 1 = -4.2%, about 4%. U.S. Consumer Cards: revenue 18,258 / 13,209 - 1 = 38.2%, about 38%; net interest income over average loans 20,169 / 170,000 = 11.9%, about 12 cents per dollar; Q2 2026 net credit losses over net interest income 1,850 / 5,180 = 35.7%, about 36%, more than a third; share of Citi revenue 18,258 / 85,225 = 21.4%, about 21%. Markets: rates and currencies 11,749 / 22,409 = 52.4%, about 52%; fixed income 16,745 / 22,409 = 74.7%, about 75%; international 14,020 / 22,409 = 62.6%, about 63%; revenue 18,888 / 20,401 - 1 = -7.4%, about 7%; net income 4,059 / 6,148 - 1 = -34.0%, about a third; revenue 22,409 / 19,108 - 1 = 17.3%, about 17%; share of Citi revenue 22,409 / 85,225 = 26.3%, about 26%. Allocated average TCE 2025 ($bn): Services 33.0 + Markets 53.5 + Banking 9.2 + Wealth 15.4 + U.S. Consumer Cards 20.3 + All Other 39.2 = 170.6; Markets 53.5 / 170.6 = 31.4%, about 31%; All Other 39.2 / 170.6 = 23.0%, about 23%, nearly a quarter. Banking: corporate lending and other 6,384 - 4,618 = 1,766, about $1,766 million; share of Citi revenue 6,384 / 85,225 = 7.5%. Wealth: Citigold and Retail Banking 7,666 / 11,272 = 68.0%, about 68%; Wealth at Work 930 / 11,272 = 8.3%, about 8%; revenue 11,272 / 9,871 - 1 = 14.2%, about 14%; 11,272 / 9,733 - 1 = 15.8%, about 16%; share of Citi revenue 11,272 / 85,225 = 13.2%, about 13%. All Other: revenue on the chart basis 4,442 managed + (176) reconciling items = 4,266 (2025); 9,491 - 670 = 8,821 (2021); 8,841 + 854 = 9,695 (2022); 9,389 + 1,346 = 10,735 (2023); 7,521 + 26 = 7,547 (2024); Corporate/Other 4,442 - 5,512 Legacy Franchises = -1,070, about minus $1,070 million. Further: All Other chart basis 4,266 / 8,821 = 0.48, about half; Banking 2025 income new basis 935 / old basis 2,324 = 0.40, so 60% less, about three-fifths; Mexico consumer and small business 6,500 / 4,539 - 1 = 43.2%, about 43%; U.S. card loans 170 / 409 consumer loans = 41.6%, about two-fifths; card loans excluding the American Airlines purchase (177 - 168 - 6.6) / 168 = 1.4%; Q1 2026 card net credit losses over net interest income 1,742 / 5,116 = 34.0%, about 34%; Q2 2026 equities over fixed income 2,301 / 4,706 = 0.49, about half; investment banking fees 4,618 / 2,713 - 1 = 70.2%, about 70%; Citigold (old basis) 4,953 / 3,803 - 1 = 30.2%, about 30%; net new investment assets first half 2026 15 + 16 = 31 billion; Wealth Q2 2026 efficiency 2,377 / 3,177 = 74.8%, about 75%; Securities Services 5,990 / 5,165 - 1 = 16.0%, about 16%. More: commercial card spend 71.2 / 38.6 - 1 = 84.5%, about 84%; advisory share of investment banking fees 1,908 / 4,618 = 41.3%, about 41%; advisory share of Q2 2026 investment banking revenue 390 / 1,548 = 25.2%, about 25%; BlackRock mandate 80 / 670 investment assets = 11.9%, roughly 12%; rewards and partner payments over interchange 12,075 / 9,718 = 1.24 times; new card accounts 5,376 / 2,942 - 1 = 82.7%, about 83%. Five-business income from continuing operations 2025: 8,187 + 6,265 + 935 + 1,178 + 3,409 = 19,974; Services 8,187 / 19,974 = 41.0%, about 41%, more than two-fifths. — FY2021-Q2 2026 · publ. September 2026 · source ↗
   Method: Arithmetic on figures reported in Citigroup's recast historical supplement, Forms 10-K and 10-Q and its Q2 2026 earnings release; operands shown in the source line.
3. ReportedThe segment released $232 million of reserves in the quarter, which flattered the result.
   Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - Wealth and U.S. Consumer Cards results and key metrics. — Q2 2026 · publ. 14 July 2026 · source ↗
4. ReportedCiti's own guidance for 2026 put the card net credit loss rate at 4.0% to 4.5%, near the 2025 level of 4.29%.
   Citigroup 2026 Investor Day financial overview presentation - RoTCE targets, business targets for Services, Cards and Markets, efficiency ratio, transformation, liquidity and capital. — May 2026 · publ. May 2026 · source ↗
5. ReportedCiti's own guidance for 2026 put the card net credit loss rate at 4.0% to 4.5%, near the 2025 level of 4.29%.
   Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
6. ReportedThe first quarter was similar: net credit losses of $1,742 million against net interest income of $5,116 million, about 34%.
   Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - Wealth and U.S. Consumer Cards results and key metrics. — Q2 2026 · publ. 14 July 2026 · source ↗
7. Moat Explorer calcThe first quarter was similar: net credit losses of $1,742 million against net interest income of $5,116 million, about 34%.
   Moat Explorer calculation from Citigroup segment figures ($ millions unless stated; calendar years; segments as restated in the 8-K of 3 April 2026). Services: cross-border transaction value 416.4 / 279.5 - 1 = 49.0%, about half; U.S. dollar clearing 177.1 / 146.2 - 1 = 21.1%; fee revenue 6,385 / 4,967 - 1 = 28.5%, about 29%; net interest income 15,001 / 6,866 = 2.18 times, about 2.2; NII share 15,001 / 22,636 = 66.3%, about 66%; revenue 22,636 / 12,539 - 1 = 80.5%, about 81%; TTS 16,646 / 9,187 - 1 = 81.2%; Securities Services 5,990 / 3,352 - 1 = 78.7%, about 79%; Securities Services revenue over assets under custody 5,990 / 31,400,000 = 0.019%, about 1.9 hundredths of a percent; international share 15,729 / 22,636 = 69.5%, about 69%; share of Citi revenue 22,636 / 85,225 = 26.6%, about 27% (2025), 12,539 / 71,574 = 17.5%, about 18% (2021). Deposits: year-end 1,308,681 / 1,365,954 - 1 = -4.2%, about 4%. U.S. Consumer Cards: revenue 18,258 / 13,209 - 1 = 38.2%, about 38%; net interest income over average loans 20,169 / 170,000 = 11.9%, about 12 cents per dollar; Q2 2026 net credit losses over net interest income 1,850 / 5,180 = 35.7%, about 36%, more than a third; share of Citi revenue 18,258 / 85,225 = 21.4%, about 21%. Markets: rates and currencies 11,749 / 22,409 = 52.4%, about 52%; fixed income 16,745 / 22,409 = 74.7%, about 75%; international 14,020 / 22,409 = 62.6%, about 63%; revenue 18,888 / 20,401 - 1 = -7.4%, about 7%; net income 4,059 / 6,148 - 1 = -34.0%, about a third; revenue 22,409 / 19,108 - 1 = 17.3%, about 17%; share of Citi revenue 22,409 / 85,225 = 26.3%, about 26%. Allocated average TCE 2025 ($bn): Services 33.0 + Markets 53.5 + Banking 9.2 + Wealth 15.4 + U.S. Consumer Cards 20.3 + All Other 39.2 = 170.6; Markets 53.5 / 170.6 = 31.4%, about 31%; All Other 39.2 / 170.6 = 23.0%, about 23%, nearly a quarter. Banking: corporate lending and other 6,384 - 4,618 = 1,766, about $1,766 million; share of Citi revenue 6,384 / 85,225 = 7.5%. Wealth: Citigold and Retail Banking 7,666 / 11,272 = 68.0%, about 68%; Wealth at Work 930 / 11,272 = 8.3%, about 8%; revenue 11,272 / 9,871 - 1 = 14.2%, about 14%; 11,272 / 9,733 - 1 = 15.8%, about 16%; share of Citi revenue 11,272 / 85,225 = 13.2%, about 13%. All Other: revenue on the chart basis 4,442 managed + (176) reconciling items = 4,266 (2025); 9,491 - 670 = 8,821 (2021); 8,841 + 854 = 9,695 (2022); 9,389 + 1,346 = 10,735 (2023); 7,521 + 26 = 7,547 (2024); Corporate/Other 4,442 - 5,512 Legacy Franchises = -1,070, about minus $1,070 million. Further: All Other chart basis 4,266 / 8,821 = 0.48, about half; Banking 2025 income new basis 935 / old basis 2,324 = 0.40, so 60% less, about three-fifths; Mexico consumer and small business 6,500 / 4,539 - 1 = 43.2%, about 43%; U.S. card loans 170 / 409 consumer loans = 41.6%, about two-fifths; card loans excluding the American Airlines purchase (177 - 168 - 6.6) / 168 = 1.4%; Q1 2026 card net credit losses over net interest income 1,742 / 5,116 = 34.0%, about 34%; Q2 2026 equities over fixed income 2,301 / 4,706 = 0.49, about half; investment banking fees 4,618 / 2,713 - 1 = 70.2%, about 70%; Citigold (old basis) 4,953 / 3,803 - 1 = 30.2%, about 30%; net new investment assets first half 2026 15 + 16 = 31 billion; Wealth Q2 2026 efficiency 2,377 / 3,177 = 74.8%, about 75%; Securities Services 5,990 / 5,165 - 1 = 16.0%, about 16%. More: commercial card spend 71.2 / 38.6 - 1 = 84.5%, about 84%; advisory share of investment banking fees 1,908 / 4,618 = 41.3%, about 41%; advisory share of Q2 2026 investment banking revenue 390 / 1,548 = 25.2%, about 25%; BlackRock mandate 80 / 670 investment assets = 11.9%, roughly 12%; rewards and partner payments over interchange 12,075 / 9,718 = 1.24 times; new card accounts 5,376 / 2,942 - 1 = 82.7%, about 83%. Five-business income from continuing operations 2025: 8,187 + 6,265 + 935 + 1,178 + 3,409 = 19,974; Services 8,187 / 19,974 = 41.0%, about 41%, more than two-fifths. — FY2021-Q2 2026 · publ. September 2026 · source ↗
   Method: Arithmetic on figures reported in Citigroup's recast historical supplement, Forms 10-K and 10-Q and its Q2 2026 earnings release; operands shown in the source line.
8. ReportedNet credit losses were about a fifth of net interest income in 2021, about 39% in 2024 and about 36% in 2025.
   Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
9. Moat Explorer calcNet credit losses were about a fifth of net interest income in 2021, about 39% in 2024 and about 36% in 2025.
   Moat Explorer calculation from Citigroup segment and Investor Day figures ($ millions unless stated). Firm: PPNR 30.1 / 24.0 - 1 = 25.4%, about 25% ($bn). Services: operating expenses 10,813 / 7,682 - 1 = 40.8%, about 41%; revenue 22,636 / 12,539 - 1 = 80.5%, about 81%; TTS net interest income 12,238 / 5,963 = 2.05 times; TTS non-interest revenue 4,408 / 3,224 - 1 = 36.7%, about 37%; quarterly Services net interest income 4,050 / 3,317 - 1 = 22.1%, about 22%; Securities Services net interest income 2,763 / 903 = 3.06 times, about three times; Securities Services non-interest revenue 3,227 / 2,449 - 1 = 31.8%, about 32%; interest share 2,763 / 5,990 = 46.1%, about 46%; North America 6,907 / 3,744 - 1 = 84.5%, about 84%; international 15,729 / 8,795 - 1 = 78.8%, about 79%; international share 8,795 / 12,539 = 70.1% (2021) and 15,729 / 22,636 = 69.5% (2025); TTS non-interest revenue quarterly 1,182 / 1,049 - 1 = 12.7%, about 13%; cross-border value quarterly 115.2 / 90.7 - 1 = 27.0%, about 27%; share of Citi average deposits Q2 2026 1,017 / 1,504 = 67.6%, about 68%; assets under custody 31.4 / 24.0 - 1 = 30.8%, about 31%; quarterly Securities Services revenue 1,787 / 1,271 - 1 = 40.6%, about 41%; average Services deposits 935 / 808 - 1 = 15.7%, about 16%. Markets: net interest income share 6,072 / 19,108 = 31.8%, about 32% (2021), 9,687 / 22,409 = 43.2%, about 43% (2025); average loans 141 / 111 - 1 = 27.0%, about 27%; average assets 1,203 / 941 - 1 = 27.8%, about 28%; average trading assets 533 / 340 - 1 = 56.8%, about 57%; rates and currencies 11,749 / 11,735 - 1 = 0.1%; equities 5,664 / 3,969 - 1 = 42.7%, about 43%; spread products 4,996 / 5,386 - 1 = -7.2%, about 7% below; Q4 2025 revenue 4,609 / 6,075 - 1 = -24.1%, about 24% below. Banking: international share 2,977 / 6,384 = 46.6%, about 47%; equity underwriting 699 / 2,152 - 1 = -67.5%, about two-thirds less; loan hedges -140 + 307 - 443 - 180 - 118 = -574; advisory 390 / 649 - 1 = -39.9%, about 40%. Wealth: net interest income share 7,582 / 11,272 = 67.3%, about 67%; international 4,243 / 3,382 - 1 = 25.5%, about 25%; North America 7,029 / 5,949 - 1 = 18.2%, about 18%; North America 7,029 / 5,878 - 1 = 19.6%, about 20%; operating expenses 9,455 / 9,374 - 1 = 0.9%, about 1%; revenue 11,272 / 9,733 - 1 = 15.8%, about 16%; international share 4,243 / 11,272 = 37.6%, about 38%; Private Bank 2,676 / 2,970 - 1 = -9.9%, about 10% below; Private Bank Q2 2025 excluding the gain 731 - 80 = 651, 769 / 651 - 1 = 18.1%, about 18%; Citigold and Retail Banking quarterly 2,010 / 1,502 - 1 = 33.8%, about 34%; Wealth at Work 930 / 691 - 1 = 34.6%, about 35%; average loans 199 / 182 - 1 = 9.3%, about 9%; client deposits 413 / 438 - 1 = -5.7%, about 6% lower. U.S. Consumer Cards: average loans 170 / 125 - 1 = 36.0%, about 36%; operating expenses 6,755 / 5,693 - 1 = 18.7%, about 19%; revenue 18,258 / 13,209 - 1 = 38.2%, about 38%; general-purpose spend 152.4 / 125.6 - 1 = 21.3%, about 21%; private-label spend 13.9 / 16.7 - 1 = -16.8%, about 17% less; rewards and partner payments 12,075 / 9,096 - 1 = 32.7%, about 33%; interchange 9,718 / 7,521 - 1 = 29.2%, about 29%; other fees 427 / 229 = 1.86 times, nearly double; Q4 over Q1 2025 rewards 3,215 / 2,821 - 1 = 14.0%, about 14%, interchange 2,526 / 2,285 - 1 = 10.5%, about 11%; 2025 acquisitions general-purpose 1,696 + 1,704 + 1,872 + 2,115 = 7,387 thousand, private-label 1,144 + 1,551 + 1,339 + 1,572 = 5,606 thousand; general-purpose average loans 138.6 / 95.2 - 1 = 45.6%, about 46%; private-label 29.8 / 27.3 - 1 = 9.2%, about 9%; net credit losses over net interest income 2,856 / 14,518 = 19.7%, about a fifth (2021), 7,457 / 19,243 = 38.8%, about 39% (2024), 7,290 / 20,169 = 36.1%, about 36% (2025). All Other: Asia consumer 812 / 3,871 = 21.0%, about a fifth; operating expenses 8,698 / 9,628 - 1 = -9.7%, about 10% less; managed revenue 4,442 / 9,491 = 0.47, down more than half; allocated tangible equity 39.2 / 27.7 - 1 = 41.5%, about 42%. Expenses ($bn): five businesses and Corporate/Other 49.1 / 43.2 - 1 = 13.7%, about 14%. Latest-quarter pass: Markets first-half revenue 7,246 + 7,007 = 14,253 against 6,075 + 5,980 = 12,055, up 18.2%, about 18%; Markets first-half net income 2,595 + 2,387 = 4,982; Banking 304 + 350 = 654; equities 2,080 + 2,301 = 4,381, and 4,381 / 5,664 = 77.3%, about 77%; investment banking 1,326 + 1,548 = 2,874, and 2,874 / 4,781 = 60.1%, about 60%; fixed income 16,745 / 14,115 - 1 = 18.6%, about 19%; equities 5,664 / 4,993 - 1 = 13.4%, about 13%; Markets expenses 13,253 / 12,450 - 1 = 6.4%, about 6%; Services North America share 1,339 / 5,043 = 26.6%, about 27% (1Q24), 1,939 / 6,272 = 30.9%, about 31% (4Q25); year-end deposits 1,403,573 / 1,284,458 - 1 = 9.3%, about 9%; Services average deposits 1,017 / 961 - 1 = 5.8%, about 6%; Cards first-half revenue 4,757 + 4,521 = 9,278 against 4,567 + 4,471 = 9,038, up 2.7%, about 3%; general-purpose loans 143.2 / 139.0 - 1 = 3.0%, about 3%; American Airlines 6.6 / 177 = 3.7%, about 4%; private-label 29.8 / (138.6 + 29.8 + 3.9) = 29.8 / 172.3 = 17.3%, about 17%; Wealth expenses 9,721 / 8,061 - 1 = 20.6%, about 21%; Wealth first-half net income 432 + 583 = 1,015 against 191 + 385 = 576, nearly double, and 639 + 511 = 1,150 in the first half of 2021; Citigold 2,181 / 3,177 = 68.6%, about 69%; Private Bank 757 / 664 - 1 = 14.0%, about 14%; Wealth at Work 246 / 268 - 1 = -8.2%, about 8% lower; U.S. non-interest-bearing deposits 121,610 / 734,662 = 16.6%, about 17%; tangible book value per share 100.89 / 97.06 - 1 = 3.9%, about 4%; JPMorgan, Bank of America and Wells Fargo 911.91 + 396.48 + 250.90 = 1,559.29, and 1,559.29 / 225.24 = 6.9, nearly seven times; Wealth expenses over revenue 2,377 / 3,177 = 74.8%, about 75% (Q2 2026). — FY2021-Q2 2026 · publ. September 2026 · source ↗
   Method: Arithmetic on figures reported in Citigroup's recast historical supplement, its Q2 2026 earnings release and its 2026 Investor Day presentation; operands shown in the source line.
10. ReportedThe allowance has come down too, from 8.19% of loans in the first quarter of 2024 to 7.74% at the end of 2025, which is how releases add to earnings.
    Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
11. ReportedFor 2025 as a whole the segment released $241 million of loan reserves.
    Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗

• Citigroup Form 10-K, FY2025